300071.SZ WACC - Weighted Average Cost of Capital

The WACC of Spearhead Integrated Marketing Communication Group (300071.SZ) is 6.1%.

The Cost of Equity of Spearhead Integrated Marketing Communication Group (300071.SZ) is 6.10%.

The Cost of Debt of Spearhead Integrated Marketing Communication Group (300071.SZ) is 5.00%.

	Range	Selected
Cost of equity	5.10% - 7.10%	6.10%
Tax rate	5.40% - 10.70%	8.05%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.1% - 7.1%	6.1%

WACC

300071.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.4	0.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.10%

Tax rate	5.40%	10.70%
Debt/Equity ratio	0.03	0.03
Cost of debt	5.00%	5.00%

After-tax WACC	5.1%	7.1%


Selected WACC	6.1%

300071.SZ's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 300071.SZ:

cost_of_equity (6.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.